While many companies have cut back on business travel, competition remains strong in the U.S. corporate travel insurance market, experts say.

The products and services available to buyers of business travel coverage are innovative and, most importantly, help safeguard the employee, insurers and brokers say.

Nine principal insurers provide business travel coverage and many are devising ways to expand their offerings, brokers and insurers say.

“Not only is corporate travel insurance affordable, but it provides a very valuable benefit structure, which is integral in today's business environment when looking after the consideration of a company's most valuable asset—their employees,” said Michael Dangler, New York-based senior vp and national specialty benefits practice leader for Willis Group Holdings P.L.C.

Typical travel insurance covers accidental death and dismemberment. It can cover employees' business trips as well as side trips to visit family or friends. Typical limits range from a multiple of an employee's salary—such as three or five times their annual pay—or progress in increments with limits up to $250,000, $500,000 and $1 million.

Standard policies typically include medical evacuation, repatriation of remains, delayed or lost baggage, and trip delay or interruption.

Popular additions include out-of-country medical insurance; security evacuation and security services, which could include identity theft; political evacuation; natural disaster services; and trip information services.

Terrorism is not excluded under most policies, but war risk is excluded, say insurers who add that a company can purchase specific war risk coverage if it knows it has an exposure in a high-risk area.

Kidnap and ransom coverage is offered by some insurers, such as ACE Ltd. and Chartis Inc. A basic K&R benefit on travel policy could pay up to $50,000 for a covered event, said Karen Sheekey, ACE USA vp of strategy and product development for its accident and sickness segment. She added that if a company requires additional coverage, ACE has the capability to provide standalone coverage with limits more than $1 million.

William W. Beardsley, Philadelphia-based senior vp of Arch Insurance Group's travel and accident division, said the decision to carry K&R benefits as part of a travel insurance policy is usually done on a case-by-case basis.

“While a K&R benefit may be included in a corporate travel package, comprehensive kidnap and ransom protection and services are generally purchased separately due to the specialty nature of implementing this service if a K&R event occurs,” Mr. Beardsley said.

Mr. Beardsley added that premium costs vary depending on the benefit structure or principal sum limits, and the number of travel days and destinations. He noted that personal sojourn coverage can be added to cover an employee on business who also might visit friends or family.

“While risk managers are looking for the best value of for their premium dollars, first and foremost they are thinking about the safety and security of their employees,” said Frank D'Ancona, Wilmington, Del.-based vp of sales and marketing for ACE USA's accident and sickness division. “The coverage they are seeking is going beyond your basic accidental death and dismemberment policy.”

Alan Kubitz, Downers Grove, Ill.-based director of risk management for The HAVI Group L.P., a supply chain and marketing services provider, said corporate travel insurance is used like a “safety net” atop other life insurance and workers compensation benefits that HAVI offers.

He said HAVI offers its employees emergency and medical evacuation coverage and medical coverage under its travel policy and the need to respond on an international level is important when purchasing it.

Mr. Kubitz said he has not had to use any of the coverages purchased, but the insurance, when used, is relatively inexpensive. While business travel insurance “doesn't apply to everyone,” it “truly is a benefit” for employees who travel for work.

Business travel also is an area in which risk managers are taking a greater hand.

“The risk community has become more involved in the placing decision of the business travel policy, especially when the business has employees who are working overseas,” said Joe Puzzo, New York-based senior vp of Chartis' accident and health group. “It is not unusual to see a request for the business travel policy as a potential complementary sale to the foreign workers compensation policy.”

Added Mr. Dangler: “When the claims come in, this type of coverage responds and it responds well.”

Copyright © 2010 Crain Communications, Inc.